In determining the sample size for a test of controls, an auditor should consider the expected deviation rate, desired confidence level, and the
A) Tolerable deviation rate.
B) Risk of incorrect acceptance.
C) Nature and cause of deviations.
D) Population size.

Question

Quizplus · Accepted Answer

The tolerable deviation rate is the maximum deviation rate that the auditor is willing to accept without modifying the planned reliance on the control being tested. It is an important factor in determining the sample size because it determines the level of risk that the auditor is willing to accept. The auditor needs to balance the desired confidence level with the tolerable deviation rate to arrive at an appropriate sample size. The risk of incorrect acceptance, nature and cause of deviations, and population size are also important factors, but they are not directly used in determining the sample size formula.

In Determining the Sample Size for a Test of Controls